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How to Rebuild Trust After An Economic Downturn

5 years ago #Success

How can financial institutions rebuild public trust after the financial crisis? The banking sector has come a long way since 2007-2008, but there is still a long road ahead.

The financial crisis of 2007-2008 hindered trust and in turn, causing problems in the financial sector. According to political scientist Eric M. Uslaner, the distrust in financial institutions leads to “a lack of willingness to compromise to achieve a larger social purpose”, which causes a vicious cycle of mistrust. Do you have a positive outlook on the Financial sector?  At James Woodman, we have many positions available in finance.  View the complete list here

The Banking Sector's Road to Recovery

CNBC states that banks have come a long way since 2008, but a lot of money that big central banks were pumping into the economy in an attempt to stabilise inflation created an artificial environment. These investments have immproved the recovery of the economy bit by bit, but the banking sector is still taking hits. The system is highly regulated.  According to CNBC, “Ultra-loose monetary policy from central banks is still not great news for lenders, because of the pressure that it adds on their profitability”. At the same time, they are also facing a highly competitive sector. The necessary restructuring after the financial crisis creates a high level of uncertainty.

The Importance of Confidence

We first need to acknowledge that trust and confidence go hand in hand, but they are not the same. Without confidence, there will be no trust and without trust, there will be no confidence. Confidence in institutions largely reflects the current performance on the economy and management. “The decline in generalised trust is not attributable to short-term economic fluctuations, but to longer-term trends.” political scientist Eric M. Uslaner explains.

The sacrifices made by the central banks have definitely helped the economy come a long way but there is also still a bumpy road of recovery ahead. If you are confident in your financial abilities to help financial growth, have a look at our open positions.


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